Answer all of the following six questions in the space provided after each question. Question 1 The demand curve and supply curve for one-year T-bills (with a face value of $1000 ) were estimated using the following equations: P=11400.6BdP=700+BS where P is the price of bonds, Bd is the quantity demanded of bonds and Bs is the quantity supplied of bonds. a) Calculate the equilibrium price and quantity of bonds in this market. b) Using your answer to part (a) of this question, calculate the equilibrium interest rate in this market. Following a dramatic increase in the value of the stock market, the demand for bonds decreased and this resulted in a parallel shift in the demand curve for bonds, such as the price of bonds at all quantities decreased by $100. Assume that there was no change in the supply function for bonds. c) Calculate the equilibrium price and quantity of bonds in this market after the abovementioned decrease in the demand for bonds. d) Using your answer to part (c) of this question, calculate the new equilibrium interest rate in this market. e) Based on your answers to part (a), (b), (c) and (d) of this question, what relationship do you observe between the equilibrium price of bonds and the equilibrium interest rate? [Notes/Hints: Show all steps of your calculations to get full marks. Keep at least 4 digits after the decimal point in each step of your calculations. Write down the formula you are using to find the answers to each part of this question.]